Question

Medoc Company provides the following information about its single product Targeted operating income 54 comma 790 Selling price per unit 6.30Variable cost per unit 4.55Total fixed cost 59 comma 675 What is the breakeven point in units Round intermediary calculations to the nearest cent A 31 comma 309B 5 comma 050C 34 comma 100D 5 comma 500

Answer 1

Answer:

Option C) Medoc Company's Break Even Point is 34,100 Units

Explanation:

Break Even point is defined as the level of activity or production at which the company's Total Sales Revenue is equal to its total expenses. In other words, Break Even Point is No Profit, No Loss Point.

Break Even Point in Units = Total Fixed Costs ÷ Contribution Per Unit

where:

Contribution per unit = Selling Price per unit - Variable Costs per Unit

Calculations:

Contribution per Unit = $6.30 - $4.55 = $1.75

Break Even Point in Units =  $59,675  ÷ $1.75

Break Even Point in Units =  34,100 Units